Nifty to see 5700 June; short Indiabulls, Yes Bank: Sukhani

Portfolio manager, Sudarshan Sukhani sees the Nifty correcting to 5,700 in June. There can be relief rallies in bewteen, but broadly, the thrust should be on the downside. The Bank Nifty has broken down, so weakness is likely in Nifty too, he said in an interview to CNBC-TV18.

He advises investors to take short positions in both Nifty and Bank Nifty. He is recommends investors to short Indiabulls Real Estate and Yes Bank. He is bullish on Glenmark and Apollo Hospitals and says one should buy them on dips. Also read: See slight improvement in economic activity ahead: Bankers Below is the edited transcript of Sukhani's interview to CNBC-TV18. Q: What about you? This week the Nifty could not hold on to the 6000 level what is the sense that you are getting about next week? A: I don’t believe that the bottom has fallen out from the market. I just think that the market is ripe for a deep bout of correction. The market goes up and down. We can’t stop it from coming down. The Nifty was in a trading range and on Friday, it almost decisively broke the trading range. The Bank Nifty has already broken down which is why we can say there is some certainty that the Nifty will follow suit. The target for this breakdown, this distribution, is somewhere around 5,700. So, the first leg of this decline should bring the Nifty to 5,700 that means atleast for some part of June, whether early, mid or late, the market will see selling pressure and they will be lower than where they are now. That does not mean market can’t go up and see relief rallies. They surely can. But broadly, the thrust should be on the downside. Q: Since you were indicating that the trend continues to be on the downside what would be your top sell ideas for next week? A: My top sell ideas will be Nifty and Bank Nifty. They are two indices where traders should take short positions through the use of Puts and that is something that is not for next week. One has to give it time but the Put should work out. As we enter into next week, a lot of shorting ideas are available. Two of them are from the real estate and banking sector. The first is Indiabulls Real Estate which is now confirming a bearish pattern. There is lot more downside there. It is just starting its down travel. The second is, Yes Bank. Yes Bank was in a trading range, it is broken down and this time I suspect it should take its toll and move lower. So, look at short selling – real estate and banking generally and these two stocks specially. Q: You are choosing to be safe next week; you have chosen a couple of defensive stocks from the pharma space? A: Yes, that is because next week it is likely to be choppy. There is no need to be adventurous. The first of my stock pick is Glenmark. Glenmark has seen a very smart up move. After the up move it went into a small decline, that small decline was a technical flag. The flag is broken out of the upside and the up move should resume. So, technically it is a very nice chart to be buying into. The second is Apollo Hospitals. We saw a very sharp decline in Apollo after a big up move. We are buying on a dip. Apollo Hospital is also being influenced by some news but the news is irrelevant to me. The charts are telling that a dip has occurred. This is a perfect opportunity to buy that at a lower price as it is a strongly up trending stock. Q: Your comment on currency- we have spoken so much about the equities but the rupee is sitting at a 11 month low – for next week would you have any kind of trade on the short side for the rupee? A: We had a trade on the short side since the rupee started depreciating from 54 onwards. About 57/USD is a strong round number where earlier highs were made. So, next week it is quite possible that the market could pause at 57/USD while the dollar bulls take profits and get ready for the next move. I can’t pin point next week, but I can suggest that any correction in the rupee's rate should be used as an opportunity to accumulate dollars which means sell the rupee. We are looking at a target which is about 61.